Kenai Peninsula hospital reports loss

CPGH Inc., the nonprofit organization that manages the Kenai Peninsula Borough-owned hospital, received an annual financial report that reflected operating expenses exceeding total operating revenues by more than $2.4 million as of June 30. Revenues were more than $35.3 million and expenses were in excess of $37.7 million.

Operating expenses rose by more than $5 million from $32.7 million in 2001.

The last time the hospital showed a loss from operating revenues was 1995, when it reported $394,752 over budget.

''It hurts to have one like this,'' said Bill Coghill, the certified public accountant for the independent accounting firm Mikunda, Cottrell and Co., that conducted the audit.

''Things have been rosy at the hospital. Hopefully, this is a bump in the road.''

Employee salaries and benefits, bad debt and professional fees contributed to the red ink. Benefits increased by $1.02 million and salaries by $1.4 million.

The hospital recorded $3.7 million in provisions for bad debt, an increase of $889,372, and a jump of $908,600 from about $2 million in professional services in 2001 to $2.9 million in 2002.

Ed Burke, hospital chief financial officer, said expenses were not budgeted to compensate.

''We were spending beyond our means last year,'' Burke said. ''Management did not put enough attention to monitoring and controlling expenses during that period.''

He attributed the high employee benefits to external factors, most notably a national trend in increased health insurance. The hospital recruited administrators -- including Burke, who started in July -- and physicians during that period, which accounted for the salary spike.

Burke said professional fees applied, in some cases, to temporarily hired nurses from Outside to fill vacancies or to fill in for full-time nurses taking time off.